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GDP Growth Lower than Expected

Published: June 10, 2011; 11:59 · (Vindobona)

Instead of 1.0%, the growth rate in the first quarter was only 0.9%. A plus of 4.2% year-on-year was registered.

GDP Growth Lower than Expected / Picture: © Wikimedia Commons [CC0 1.0] / Pixabay [CC0 Creative Commons]

According to calculations by the Austrian Institute of Economic Research (Wifo), the Austrian economy is growing slower than expected. Gross domestic product (GDP) increased by 4.2% year-on-year, compared to the last quarter, however, the growth rate amounted to only 0.9%. In its first forecast of mid-May Wifo still expected a rate of 1.0%.

GDP growth for the 4th quarter of 2010 has now been adjusted upwards from 0.9% to 1.0%. At the end of the last year the Austrian economy showed higher growth than the experts had initially calculated. Wifo revised its year-on-year GDP growth figures upwards from 3.0% to 3.2% for the 4th quarter and from 2.5% to 2.6% for the 3rd quarter of 2010. The increase of 0.9% in the first three months of 2011 is attributed to a strong expansion in the production of goods. According to Wifo’s statistics, the civil engineering sector still shows a weak performance.

The institute expects declining growth rates in the international economy. While Asia would still be a growth driver, latest data from the USA and the Eurozone would be a signal for a slow-down in the second quarter of this year. The same trend is expected for Austria. The growth rate in the second quarter is forecast to be less than 0.9%.